Music Hall resident groups and the Cincinnati Museum Center appear ready to agree to a small user fee on tickets and memberships to help fund ongoing work on the two historic Cincinnati buildings.

Representatives from the groups, along with members of the Cultural Facilities Task Force, are scheduled to make a proposal they hope will be acceptable to Hamilton County Commissioner Todd Portune on Monday.

Portune, in his initial reaction earlier this month to a task force's proposal to enact a quarter-cent sales tax to raise $225 million for building restorations, asked why those who used the buildings couldn't be responsible for fixes. Government grants, historic tax credits and private donations already are part of the total $331 million package.

The commissioner has proposed ticket surcharges before for another reason: to help cover a shortfall in the amount of sales tax collected for Cincinnati's riverfront stadiums. The city of Cincinnati has a 3 percent admissions tax, but it doesn't apply to nonprofits, including arts groups such as those at Music Hall or the Museum Center.

Now the groups are willing to meet him partway if it means helping save the buildings and ensure a long-term future. That proposal likely will include the creation of a dedicated pool of money, one for each building, that would be used to maintain facilities once major restorations are completed. With a specific dollar amount used as a starting point, the organizations could figure out how to get there.

"If some sort of user fee can help address long-standing issues, we'll do everything we can to implement it," said Trey Devey, Cincinnati Symphony Orchestra president.

In an interview Friday, Portune reiterated that an agreement on a user fee for Music Hall and the Museum Center was essential to gain his support for putting the sales tax on the ballot. The fee "has to be meaningful. I'm not looking to get a number that checks off a box," he said.

"The money is for preservation of facilities in perpetuity ... and set up in such a way so there is a fund for ongoing future maintenance and capital needs," Portune said.

Any user fee is expected to last only as long as the sales tax.

Exact effects on prices uncertain

How much more would it cost regular Music Hall-goers and visitors to the Museum Center? The organizations don't have exact numbers in mind, but in interviews last week leaders said they were determined to keep their prices low. They don't want a user fee to be so high that people would stop attending the Museum Center and arts groups with homes at Music Hall: the symphony, Cincinnati Pops, Cincinnati Opera, Cincinnati May Festival and, once renovation is done, Cincinnati Ballet.

Implementation would be complex. Would the user fee be a flat fee or a percentage of admission? Would it apply to all price categories?

The Museum Center has a 160-page document that lists its pricing codes, including charges for items such as memberships, individual and Omnimax tickets, and summer camps for kids. Tickets for symphony events range from $4 for youth concerts and $7 for Lollipops concerts to nearly $100 for top-tier seats, with an average ticket price of $29. Cincinnati Opera charges from $15 to $160 for single tickets, with an average price of $58. And Cincinnati Ballet employs dynamic pricing, which means it monitors the popularity of an event, and tweaks the price up or down depending on demand. The average ballet ticket price is $40.15.

Devey said he would look at placing more of the burden on CSO and Pops patrons who buy higher-priced tickets so the organizations could keep a low bottom price point.

"It makes sense that some people who use the building more have a vested interest in contributing to it, but what that really looks like still needs to be figured out a little bit further," said Cincinnati Museum Center Vice President Elizabeth Pierce.

What would Portune suggest? An adult ticket to see three Museum Center museums is currently $14.50. Portune said he believes $19.95 is a more reasonable amount for admission.

His other suggestion: Make sure visitors know that they're paying extra to save the buildings.

The economics of price elasticity

Just how much of a price hike is too much? In economics, that tricky question is called price elasticity.

The great fear on the part of arts and culture institutions is that any price increase, self-imposed or in the form of a user fee, will drive visitors and audience away, resulting in a loss of revenue.

The Cincinnati Opera raised ticket prices gradually, said Patty Beggs, general director and CEO. By contrast, the symphony in 2004 raised ticket prices by an average of 25 percent.

Devey wasn't in Cincinnati when the CSO increase was enacted, but he has dealt with the fallout ever since he arrived in 2008. Despite getting more money per ticket, about 17 percent fewer tickets were sold that next season, and total revenue dropped. Only now, 10 years later, has symphony attendance nearly recovered.

In 2012, the Museum Center considered a 5 percent price increase for members and asked analysts from Procter & Gamble to help them evaluate the idea. A family membership currently costs $130 a year.

The analysts' determination? A price increase would lead to "significant volume loss" – that is, fewer members – and a likely loss in museum revenue. The increase didn't happen.

Doug McDonald, Museum Center CEO, is already concerned about the elimination of a property tax levy that will cut $3.2 million from the Museum Center's bottom line. A Museum Center consultant recently recalculated the cost of a family membership taking that amount into consideration, along with a $7.5 million annual user-fee contribution from the Museum Center, an amount suggested at one point during discussions.

The $130 family membership went up to $347 a year to account for the $7.5 million, and all the way up to $439 adding back in the levy loss. "I don't believe anyone is going to spend $439," McDonald said.

If the price increase is so high that it affects an organization's ability to create programs, "the whole equation doesn't make sense," Beggs said.

Is there a larger community value?

In economic terms, arts groups and museums are described as having "existence value" – that is, their mere existence benefits the community overall.

Why do companies like P&G care about the arts? asks Randy Cohen, vice president for research and policy for the Washington, D.C.-based Americans for the Arts. "Rising stars have a lot of communities to choose from," he said, and a community arts and culture scene is part of a package a company can offer.

"A community needs a strong portfolio of offerings for its citizens: sports, a zoo, arts and culture offerings," Devey said. "All these assets together make up a community."

"It's bad public policy to stick the entire bill for the renovations only on the people who are actively going to those," Cohen said.

Still, those who call Music Hall and the Museum Center home say they're willing to figure out how to implement a user fee if it means not putting the community back in this spot down the road.

"Let's get these buildings in the right place, then begin to prepare ourselves for a long-term solution," Devey said. ⬛